Ms Catherine King (Ballarat, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. Will the government consider significant new policy proposals from other sources? Why is it important for such proposals to be properly detailed and costed?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the member for Ballarat for her question. The government is always open to considering new policy ideas, whether they be from the opposition or from any other sources. In fact, in my own portfolio I am eagerly awaiting savings suggestions from the opposition. It has been almost seven years since a Liberal shadow finance minister or finance minister advanced a substantial savings initiative. In fact, the 2003 budget was the last time, so I am eagerly awaiting some new ideas on that front.

We do not pick up just any old idea or any old garbled bit of gobbledegook that gets thrown at us. We apply a quality control test. Unfortunately, the proposal which the opposition most recently put forward, with respect to paid maternity leave, fails to meet that test. It is interesting today that, after a sudden burst of enthusiasm a couple of days ago, we have had not one single question promoting the new paid parental leave by the Leader of the Opposition. Some of the points I will now advance may help explain why they have dropped it like a stone. To begin with, the proposal put forward by the Leader of the Opposition completely repudiates past positions taken by not only him but also the shadow minister in charge of the program. In government the Leader of the Opposition said, ‘I’m dead against paid maternity leave.’ In January this year, the shadow minister, the member for Murray, said that they would be developing a proposal that would not put any tax burden on the business sector. Only about six weeks ago, notoriously, the Leader of the Opposition stated that the opposition committed itself to a promise of no new taxes and no increases in taxes. When confronted with the breaking of that promise yesterday, he said, ‘Sometimes you have to depart from principle.’

The flaws in the proposal put forward by the Leader of the Opposition are quite manifest. He did not consult the business community. He did not consult his economics team—the shadow Treasurer and the shadow finance minister—he did not consult his own shadow cabinet and, indeed, one of his own Liberal MPs, when confronted with the proposition by the Australian, described it as ‘a typical 1930s socialist impost on big business’ and was then surprised to discover that it was his own leader’s proposal. The detail of the proposal also does not withstand scrutiny. There has been complete confusion about the threshold. We know the threshold involves the figure of $5 million, the tax threshold above which the tax slug hits business. We know the figure is $5 million; we do not quite know what it is $5 million of. Is it turnover? Is it taxable income? Is it profit? We do not quite know, because the Leader of the Opposition has had several different positions.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

Mr Tuckey interjecting

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

Wilson is clarifying it!

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

It is good to see that the member for O’Connor is on the job; it is very good to see. If it is taxable income it is about 3,500 companies. If it is tax being paid it is only about 900, 950 or so. There is a big difference between these possibilities. Unfortunately, the Leader of the Opposition cannot quite say when his paid parental leave would start—maybe sometime around 2013. He cannot say whether the tax impost would be permanent or temporary; he described it as a ‘temporary levy’. And he cannot say whether or not he would support the legislation the government is putting to the Senate and to this House to introduce our paid parental leave scheme. He cannot say how he would prevent abuse of the $5 million threshold or unfairness that would flow from it. How would he stop companies from restructuring to avoid the tax? How would he protect companies that are above the threshold, and hit by the tax, from competition from companies that they compete with that are below the threshold? How would he remove the implicit disincentive involved with his tax impost for companies to merge? How would he prevent the tax being passed on to consumers?

I note that the head of the Institute of Public Affairs, prominent Liberal Party figure John Roskam, said the following in response, describing his proposal as disastrous because ‘ultimately tax on businesses’—whether they are big businesses or small businesses—‘gets passed through to the consumer, and what we are going to see, as Lindsay Tanner identified, is massive compliance issues’. This is a prominent figure in the Liberal Party agreeing with me. A very prominent figure who has some political and policy substance actually agrees with my assessment and the government’s assessment of the policy merits of the scheme.

Over the last few months we have seen the Leader of the Opposition out there on the quad bike, in the speedos, in the swimming pool. No doubt we are going to see him abseiling and bungee jumping and all those other kinds of things in due course. He should start paying some attention to his day job. If he is going to put forward policy propositions that he expects the government to adopt, that involve big slugs on business and that threaten jobs and the economy, and he proposes to block the government’s own initiative, he needs to do some very serious homework. This will not cut the mustard, and it means he will be a substantial threat to the economy and to the budget, a risk to the future prosperity of this nation.